Mr Kipling sets sights on US market after exceedingly good trial in Canada | Premier Foods

Mr Kipling is heading to the US in January with chocolate and salted caramel cakes after a successful trial in Canada.

Owner Premier Foods announced the move as it recorded a slide in sales and profits in its main markets over the last six months, with shoppers returning to dining out and overseas deliveries hit by shipping problems.

The British maker of French fondant fancies and Bakewell slices said Mr Kipling is also widening its range into biscuits and ice-cream for the first time while Premier is also planning Angel Delight and Ambrosia custard flavoured ice-cream, as it extends its well-established brands into new areas.

The international expansion comes despite a 5% fall in sales overseas for the group, which also owns Oxo and Bisto, compared with a year before as shoppers returned to more normal behaviour after repeated lockdowns. Deliveries to Australia and North America were also delayed by problems with global shipping.

The company said it expected to spend £25m in the year as a whole as it invested in its supply chain to improve efficiency.

Shares in the company slid just over 4% as it said total sales fell 6.5% to £394m in the six months to 2 October and pretax profits fell 39% to £30.7m as shoppers reined in spending at supermarkets and cooking at home to spend their money in restaurants, cafes and workplaces. However, half-year profits were just over double those before the pandemic.

Premier Foods said it had been able to “successfully manage and navigate” challenges from widespread supply chain disruption, including a shortage of lorry drivers and cost inflation, and was on track to deliver profit expectations for the year.

It said the cake market had been less affected by big changes in consumer behaviour during the first year of the pandemic while the Covid-related costs had reduced.

Alex Whitehouse, the chief executive of Premier Foods, said price rises for shoppers were likely next yeargiven higher raw ingredient prices on commodities such as sugar, dairy and wheat. However, he said the company was looking for ways to be more efficient and cut costs to offset inflation.

Whitehouse said the company intended to pay shareholders a full-year dividend for the second time in over a decade. The payment comes as pretax profits were held up by a steady trading performance and significantly reduced interest costs after the firm cut its debts and refinanced the remainder so it was paying lower interest rates.

“I am particularly pleased with how well the business is successfully navigating the widely reported industry wide-challenges including logistics, labour shortages and input cost inflation to deliver such a strong set of results, which again underlines the robustness of our operating capabilities,” he said.

Analysts said sales and profits at Premier were ahead of expectations.

The pandemic has helped revive the company which spent years struggling with heavy debts and pension liabilities. Clive Black, an analyst at Shore Capital, said Premier’s debt reduction was “liberating the group from financing costs and so allowing for greater investment in innovation and marketing” which had helped it gain market share.